THE war that began on 28 February 2026, between the United States, Israel and Iran has triggered the largest disruption to global oil supplies in history. The effective closure of the Strait of Hormuz, through which roughly one-fifth of the world’s oil trade passes, sent shockwaves through energy markets. Global oil supply plunged by 10.1 million barrels per day in March and Brent crude surged towards $120 a barrel. Eight months into the conflict, the crisis remains far from over. On October 16, Brent climbed back to $110 a barrel, almost 40% higher than at the start of the year. Attacks on energy infrastructure and restrictions on shipping have forced producers to seek alternative export routes and improvise new arrangements for moving crude. What began as a regional war has become a global energy emergency, exposing the vulnerability of an oil-dependent world to the disruption of a single maritime chokepoint.
Pakistan did not start this war, has no military presence in the Strait of Hormuz and has no role in the decisions that triggered the conflict. Yet its economic consequences are being felt far beyond the battlefield. Roughly four-fifths of Pakistan’s crude oil imports come from Gulf producers, while its liquefied natural gas supplies are also vulnerable to disruptions along critical maritime routes. Higher international oil prices inflate the import bill, increase domestic fuel costs and place additional pressure on an economy already struggling with scarce foreign exchange and mounting external obligations. Before the crisis, Pakistan’s annual petroleum import bill was estimated at $15-16 billion. If elevated prices persist, the additional cost could run into billions of dollars, placing further strain on foreign exchange reserves and complicating the task of stabilizing the economy. For a country with limited fiscal space, an external energy shock can quickly become a balance-of-payments problem.
The consequences do not end at the oil market. In Pakistan, they reach the household through higher transport costs, more expensive food and rising electricity bills. As freight charges increase, so does the cost of moving wheat, cooking oil, vegetables and other essentials across the country. Low-income families bear the heaviest burden because they spend a larger share of their earnings on necessities and have little room to absorb further price increases. The World Bank’s October 2026 economic update reported that Pakistan accounts for approximately 48% of people living in extreme poverty across the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region. This vulnerability makes energy price shocks particularly damaging. Households already struggling to meet basic expenses have little protection against another rise in the cost of living. Fuel subsidies and temporary relief measures may soften the immediate impact, but they cannot shield families from inflation spreading through the wider economy.
The deeper lesson lies in the structural weaknesses of Pakistan’s energy system. Limited strategic petroleum reserves, inadequate pipeline links to alternative suppliers and domestic production that falls short of national demand leave the country exposed to disruptions in international markets. Its dependence on imported oil and liquefied natural gas makes transport and electricity generation vulnerable to events far beyond its borders. The International Energy Agency’s World Energy Investment 2026 report confirms that the Middle East conflict is prompting countries to reassess energy security, diversify supply routes and invest in resources available domestically. Pakistan, meanwhile, faces mounting debt, severe fiscal constraints and continued dependence on IMF support, limiting its ability to respond quickly. These constraints, however, make delayed reform more costly, not less urgent. Greater investment in renewable energy, energy storage, domestic resources, grid improvements and energy efficiency could reduce exposure to imported fuels. Diversifying import sources and strengthening emergency reserves would provide additional protection. None of these measures can eliminate external shocks, but together they can reduce the extent to which international crises destabilize the domestic economy.
The crisis also raises a larger question of international responsibility. The Strait of Hormuz is vital to global energy security, yet the consequences of its disruption fall disproportionately on countries that neither control the conflict nor possess the resources to withstand prolonged shocks. Pakistan should use its engagement at the United Nations, the OIC and other multilateral forums to press for secure energy transit, coordinated emergency arrangements and greater support for vulnerable energy-importing economies. International burden-sharing, however, cannot substitute for domestic reform. Financial assistance may ease the immediate pressure, but only sustained investment in energy diversification, strategic reserves and efficiency can reduce the country’s long-term exposure.
Pakistan cannot determine how or when this war will end. It can, however, decide whether the next energy crisis will find it equally unprepared. An economy that relies heavily on imported energy, has limited fiscal space and passes rising costs on to households will continue to turn external shocks into domestic hardship. The poorest citizens, who have the least capacity to absorb these shocks, invariably pay a disproportionate price. Pakistan’s energy insecurity is not merely an economic weakness. It is one of the channels through which global instability deepens domestic poverty. Until the country makes energy security a sustained national priority rather than an emergency response to each new crisis, it will continue to import not only its energy but also the inflation and deprivation that accompany it.
—The writer is PhD in Political Science, and visiting faculty at QAU Islamabad.
